Stocks set to snap losing streak; futures higher

NEW YORK 
Stocks appear headed to snap their worst losing streak since the market bottomed last March. Futures are sharply higher Monday.

The market is trying to bounce back from a three-day losing streak that saw the Dow Jones industrial average fall 5.2 percent, including a 2.1 percent drop on Friday. Concerns about a new proposal from President Barack Obama to tighten regulation over the banking sector spooked the market and was the main driver of the sell-off.

Overseas markets continued their slide Monday, following the decline in U.S. markets to end last week. Asian shares fell again following concerns about the banking sector. The Bank of China said it plans to raise billions of dollars to replenish capital and meet new government requirements.

Investors will be looking to Washington this week for clues about potential regulatory overhaul. Obama said Thursday he wants to restrict how much big banks can use their own money for trading and limit the overall size of the largest banks. Few other details were provided, leading to uncertainty about how it will affect the market.

A simmering battle over Federal Reserve Chairman Ben Bernanke's reappointment could also sway trading throughout the upcoming week. Bernanke's term ends Sunday and a growing chorus of senators have been pinning the struggling economy on the Fed chairman.

Hearings on Bernanke's reappointment come as the Fed will be holding a regularly interest-rate setting meeting on Tuesday and Wednesday. The Fed is expected to hold rates at record lows, so investors will be examining the statement for signs of economic strength and to try and determine when the Fed might begin to raise rates.

Investors will receive plenty of economic data and earnings reports throughout the week to help determine how the economy is faring. Thus far, earnings have mostly topped analysts' expectations. But unlike in recent quarters, that has not helped send stocks higher. Analysts say traders are paying more attention to specifics within earnings reports, such as revenue growth, and forecasts rather than seizing on a better-than-expected profit as a reason to buy shares.

Dozens of earnings reports from nearly all sectors are scheduled for release throughout the week, including Apple Inc., Johnson & Johnson, Amazon Inc. and AT&T Inc.

The first estimate of the nation's fourth-quarter economic output is due out Friday. The gross domestic product report is expected to show the economy grew by an annual rate of 4.5 percent during the October-December period, further showing a recovery is underway. The economy grew 2.2 percent during the third quarter.

Reports from the housing market will also be in focus throughout the week. The battered sector has shown some signs of improvement, though reports have indicated that recovery is slow and uneven.

Sales of existing homes likely fell 7.3 percent to a seasonally adjusted annual rate of 6.06 million in December, compared with the previous month. The decline is likely due to the timing of tax credit that was eventually extended.